With the hot property market in Singapore, many property developers are snapping up units in their own projects, particularly high-end properties.
The Singapore Exchange filings showed that at least four listed property developers have sold units in their residential projects to relatives or “interested parties”, which can be a director, a controlling shareholder, a chief executive or an associate.
Madam Cecilia Kok, wife of City Developments (CDL) executive chairman Kwek Leng Beng, acquired a third-floor unit in the Residences at W Singapore Sentosa Cove for about $4.6 million, after a 22-percent discount.
Members of the public were also given a 20-percent discount at the time the option to purchase was granted.
According to CDL’s statutory filing, an additional two percent discount was given to its directors, including their spouses and children, under the company’s preferential discount scheme for buying units in its projects.
Mr. Chua Thian Poh, chairman and chief executive of Ho Bee Investment, and his wife, Madam Ng Noi Hinoy, have both purchased units in the Seascape at Sentosa Cove condo project. A 2,164-sq-ft unit costs around $5.6 million, while one 2,164-sq-ft unit went at $7.6 million.
The couple also received an additional two percent discount over the price offered to the public.
Nine units at the 229-unit The Laurels project were also acquired by interested parties from its developer, Sing Holdings, with a three-percent discount.
The buyers included Sing Holdings chief executive Lee Sze Hao and his wife Madam Susan Soh, and controlling shareholders Lee Yit and Lee Sze Siong, both Mr. Lee’s siblings. Prices of the units ranged from $1.4 million to $4.9 million.
Mr. Colin Tan, research and consultancy director at Chesterton Suntec International, said that purchases made by interested parties can be a developer’s marketing strategy to kickstart sales when a development is released.
“But if it’s a good unit in a good development location, then it also makes for a good investment that usually pays off for family members who have first pickings,” said Mr. Tan.
Mr. David Gerald, president of the Securities Investors Association of Singapore, also said that statutory filings allowed property developers to be transparent and above board in their dealings.
“Stakeholders need to be informed that this is a fair transaction…since too many of these sales at too steep a discount might affect the bottom line of the firm,” he noted.
Sales to interested parties must be approved by the company’s audit committee and considered fair, reasonable and not prejudicial to the company’s interest or to its minority shareholders.